A New Kind of Business as Usual

by Curtis Runyan

(Washington, DC, October 2003) In the wake of the recent corporate scandals on Wall Street, corporate citizenship and governance issues are getting a lot more attention, even at business schools. In the past few years, a growing number of prominent MBA programs have begun to require courses in social and environmental ethics for their students.

"Corporate governance is a mess today, and the issue is now on the table at board meetings all of the time," said Deszo Horvath, who is dean of the Schulich business school at York University in Toronto, Canada. "I think there is a lot to be done to educate the corporate community."

In the past decade, Horvath has reconfigured his business school to incorporate ethics and environmental coursework into its core program of studies. And now his MBA program is leading the way -- along with the business schools at George Washington, Michigan, North Carolina, Stanford, and Yale -- in training business leaders to cope with a lot more than just the bottom line. The programs have been ranked as "on the cutting edge," according to a recent assessment of social and environmental training at business schools around the world.

"Early on it was less obvious to recruiters the added value of students who had ethics or environment backgrounds," said Horvath. "But very quickly it became apparent that these students were much more well-rounded, and able to function in a much more complex environment."

Schulich students must take courses featuring social responsibility and environmental management, and can choose from a number of electives on the topics. For example, the school offers a course called "Management Practices for Sustainable Business," which introduces students to the concept of the triple bottom line: balancing a company's economic performance, social justice, and environmental quality.

The school also houses the corruption watchdog organization, Transparency International Canada, and holds an annual conference on corporate accountability and transparency. Specializations include business and sustainability, business ethics, and nonprofit management and leadership. "The way we teach gives the students a kind of judgment and capability to make choices beyond those who only have a very narrow focus on economic imperatives," said the dean.

And Schulich's professors have rallied behind the changes. They have published an impressive body of research on business ethics, accountability and transparency, and sustainability and nonprofit management. But most importantly, said Horvath, the school has seriously integrated the triple bottom line into a growing number of courses, conferences, and classroom lectures.

The Aspen Institute and the World Resources Institute recently released a report recognizing business schools that have incorporated issues of social and environmental stewardship into their programs. "Beyond Grey Pinstripes 2003," the fourth in a series started in 1998, surveyed more than 100 MBA programs around the world on their ethics and environment-related coursework, research, and extracurricular activities.

For example, the University of North Carolina's MBA program requires students to take three core classes on ethical management and globalization, which explore social and environmental issues, including poverty and industrialization. Stanford offers financial support for students who graduate to take jobs at nonprofit groups or public agencies. Students at Yale's School of Management can earn a joint degree with the School of Forestry and Environmental Studies.

"We hope that business school graduates will have the skills to make business decisions in a complex global economy where environmental and social issues are key factors," said WRI's Meghan Chapple, a coauthor of the Pinstripes report. "Business leaders who can develop new products and processes that take into account issues like human rights, water scarcity, or climate change will be ahead of the game. They can help bring cost savings and new markets to companies, and benefit society."

A number of corporations have already prioritized hiring students with this kind of background. U.S. corporate giants Hewlett-Packard and Suncor, and the Canadian company Dofasco, have been hiring Schulich students and others with similar training. "Corporations must understand that it could be a competitive advantage for them to work for the triple bottom line," said Horvath. "I think our graduating students are going to be the ones, to some extent at least, to lead the way to this change."